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The bank is talking to institutional investors about making up the shortfall, the source said, adding that the lender would prefer investments from institutions over those from individual investors.

Doubts over key foreign bidders have prompted concerns that India's central bank not allow them to take ownership stakes in Yes Bank, the news outlet reported. According to Canadian court records, Braich has been involved in lawsuits with family members and creditors.

Yes Bank said the reported rejection is speculative, adding that it does not comment on market speculation, Bloomberg reported.